Archives for August 2009

Don’t try to force an on-premises, packaged software product to the cloud.

Legacy software is a square peg and SaaS is a round hole. No matter how hard you try, forcing legacy, on-premises software to fit into the “SaaS model” is at worst not going to work and at best, requires cutting corners.

It is critical for legacy software vendors to understand that SaaS is not an evolution of software but a new and different business architecture. If forced to choose a lineage, SaaS has more in common with the evolution of the web rather than traditional software.

As vendors leveraged the web to offer more functionality to businesses, it became clear that the future of business software was on-demand, web-native, etc. Legacy software vendors that shunned the web as a toy and kept trying to move behind their clients’ firewalls, are now scrambling to play catch-up with their web-native analogs.

This is, unfortunately, leading to the aforementioned shortcuts as vendors are looking for ways to “SaaS-ify” their applications through the ASP model, Virtualized Desktop, or even just a change in licensing (“pay as you go!”), etc. They are bringing their legacy baggage to the on-demand market, and calling it SaaS.

Unfortunately, with these non-SaaS architectures, vendors will continue to under-serve the market as they have not fully explored and embraced the SaaS Business Architecture; they have just changed the delivery method or the billing method for the same product they have always had.

To be clear, whether they put a virtualized desktop front-end on an application and host it for their clients, or re-write the application to serve the product over the web, without truly embracing the entire SaaS Business Architecture, they have missed out. Simply re-positioning functionality for the web does not make it SaaS.

SaaS is unique and while analogs of legacy software can be built within the SaaS Business Architecture, and legacy software can be re-written as SaaS, this is not the future of SaaS. The future of SaaS, in our opinion, is in the productization and commercialization of expertise, internal workflows, intellectual property, etc.

These will be exposed to the market through the SaaS Business Architecture in ways that have no legacy software analogs by companies that are not, and never were, software companies.

The future of SaaS is in products and services that never could have existed, at least at scale, in a legacy software world; they rely on the network-centric nature of SaaS, of the network effect of a critical mass of users. SaaS is not simply a change in the way software is delivered to end-users, but offers myriad opportunities, leverage, and revenue models within its very unique business architecture.

The road traveled to get to where SaaS is today is paved with failures, lessons-learned, obstacles, and ultimately success. The overnight success stories in SaaS, like Salesforce.com, have taken over a decade to come to fruition. As an “industry,” we have learned a lot of lessons that have allowed us to get to where we are in the evolution of the SaaS Business Architecture; there is no need to repeat the same mistakes again.

Reality Check

For those “migrating” from legacy software or an ASP model to SaaS, this is easier said than done. How can these vendors drop the legacy baggage when that is all they have? It’s a process. The reality is, moving from the legacy software business into SaaS is not easy and should not be taken lightly.

The “switch” is far more than just a technology change such as rewriting the software to be web-native and sticking it on a server. Remember: easy and worth doing are two different things and for many vendors and their clients, regardless of the effort, making the change to SaaS is very much worth it.

Make no mistake though; introducing SaaS into a legacy software company upsets not only the technology departments, but the rest of the business as well. From the marketing and sales departments, to accounting, finance, and even human resources, enterprise-wide changes must occur to adapt to the new business architecture.

Every vendor is different and must decide if it is worth it in the end. If the decision is made, then you must fully embrace the SaaS Business Architecture even if it is just a goal for your company to shoot for. Even if it takes years to get there, knowing where you are going is the key to any successful venture.

If you’re curious how we could accelerate your move to the cloud – including your go-to-market strategy – contact me and we’ll setup a time to discuss your options for moving to the cloud successfully.